Is it time for a post-growth economy?
The growth-driven economic model we have adopted is killing our planet.
The crowds of protesters that confronted US President Donald Trump during his visit to London last week have channelled the world’s outrage at all that he represents. But despite this opposition, Trump’s base is expanding. Even those who baulk at his regressive positions – his racism, misogyny, divisiveness – are willing to hold their noses and line up behind him. Why? Because of his promises to deliver growth.
Politicians rise and fall on their ability to grow the GDP. It doesn’t matter what it takes, whether it’s ripping up environmental protections, gutting labour laws, or fracking for cheap oil: If you achieve growth, you win.
This is only the beginning. As we bump up against the limits of growth – market saturation, resource depletion, climate change – politicians will become increasingly aggressive in their pursuit of it. People like Trump will proliferate because everyone knows that we need growth: if the economy doesn’t keep expanding by at least two percent or three percent a year in developed countries, it collapses into crisis. Debts can’t be repaid, firms go bust, people lose their jobs.
The global economy has been designed in such a way that it needs to grow just to stay afloat. We are all hostages to growth, and hostages to those who promise it.
This is a massive problem because growth is tightly linked to environmental degradation. Growth of three percent may not sound like much, but it means doubling the size of the economy every 20 years – doubling the number of cars, smartphones, air miles… i.e. doubling the waste. Scientists tell us that we have already exceeded key planetary boundaries, and we can see the consequences all around us: deforestation, biodiversity collapse, resource wars and climate change.
The good news is that it doesn’t have to be this way. We can choose to create an economy that doesn’t require endless growth and thus take the wind out of the sails of politicians like Trump. In fact, it’s already happening: scholars and activists around the world are building the foundations for post-growth economics.
The first step is to challenge the myth that growth is required by society. Economists and politicians tell us that we need growth in order to boost people out of poverty. But of all the new income generated by growth, only five percent goes to the poorest 60 percent of humanity. Growth is an extremely inefficient and ecologically insane way of improving people’s lives. We can end poverty much more quickly, without any growth at all, simply by distributing existing income more fairly.
This is the core principle of a post-growth economy: Equity is the antidote to growth. There are lots of ideas about how to get there. We could introduce a global minimum wage and strengthen international labour laws. We could put a maximum cap on income and wealth. We could encourage and even subsidise worker-owned cooperatives so wealth and power are distributed more equally.
But we also need to do something about our structural dependence on growth.
For example, capitalism has a built-in incentive to increase labour productivity – to squeeze more value out of workers’ time. But as productivity improves, workers get laid off and unemployment rises. To solve this crisis, governments have to find ways to generate more growth to create more jobs.
There are proven ways to escape this vicious cycle. We could introduce a shorter working week as Sweden has just done, sharing necessary labour so that everyone can have access to employment without the need for perpetual growth. Or we could ease off on the labour requirement altogether by rolling out a universal basic income,funded by progressive taxes on carbon, resource-extraction, and financial transactions.
Another reason our economy has to grow is because of debt. Debt comes with interest, and interest is a compound function. Individuals, companies and states have to grow their output simply in order to pay down their debts. We can escape this cycle by cancelling unjust or unpayable debts – maybe using citizen debt audits – which would help liberate us from the growth imperative. We could also shift to new monetary systems that don’t have debt and interest built into them from the very start.
In order to help us get back within planetary boundaries, we could introduce new rules that limit the total amount of resources that we consume and waste we produce – much like we have done with CO2 emissions – so that we never extract more than the Earth can replenish or pollute more than our ecosystems can safely absorb.
And of course, we can choose to get rid of GDP as our primary indicator of economic success and embrace saner, more holistic measures, like the Genuine Progress Indicator (GPI), which accounts for the negative ecological and social impacts of economic activity.
Countries as diverse as Bhutan, Scotland, Slovenia, Costa Rica and New Zealand are already embracing alternative measures. When politicians are told to pursue something like GPI instead of GDP, they are incentivised to maximise social goods and minimise ecological “bads”.
All of these ideas would help us transition away from the “growth-at-all-costs” model, and overthrow the tyranny of growth-obsessed politicians. We have a choice to make as a civilisation: either we prioritise growth or we prioritise life. We cannot do both. If we are going to survive the Anthropocene, it will be because we create post-growth economies that allow us to flourish in harmony with this beautiful and generous planet we call home.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.